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Taxes paid at the time of purchase are what type of cost?
Suggested Answer: A
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According to the ServiceNow Hardware Asset Management documentation, original cost is the amount paid to acquire an asset, including any taxes, fees, shipping, installation, or other expenses directly related to the purchase. Original cost is used to calculate depreciation and amortization of an asset over its useful life. The other options are not the type of cost that taxes paid at the time of purchase are. Operating expense, operating cost, and capital expense are different ways of classifying the costs of using and maintaining an asset after it is purchased.
30 comments · newest first
KE
Kendra
11 months ago
Original cost is correct, taxes are included in that!
NO
Nobuko
11 months ago
Wait, are we sure about that? Seems off to me.
LA
Lauran
11 months ago
I thought it was an operating expense, but I guess not.
SA
Santos
12 months ago
Totally agree, it's definitely original cost!
CA
Carma
12 months ago
Taxes at purchase are part of the original cost.
BE
Beckie
1 year ago
I feel like I read that taxes at purchase are part of the Original Cost, but I could also see how they might relate to Capital Expense.
NE
Nell
1 year ago
I'm a bit uncertain here. Could taxes be classified as Operating Expense? That doesn't seem right to me.
LA
Lang
1 year ago
I remember practicing a question like this, and I think it was about distinguishing between capital expenses and operating expenses.
FR
Frankie
1 year ago
I think taxes paid at the time of purchase might be considered an Original Cost, but I'm not entirely sure.
MA
Marjory
1 year ago
I remember learning about these different cost categories in class. I think the key is to focus on when the cost is incurred - at the time of purchase in this case. I've got a good feeling about this one.
CA
Carole
1 year ago
Okay, let me see. Taxes are paid at the time of purchase, so that makes me think it's either original cost or capital expense. I'll have to weigh the options carefully.
LA
Lanie
1 year ago
Hmm, I'm not entirely sure about the difference between operating expense and operating cost. I'll have to think this through carefully.
HU
Hubert
1 year ago
This seems like a straightforward question about the different types of costs. I'm pretty confident I can figure this out.
HA
Harrison
2 years ago
But operating cost includes expenses incurred in day-to-day operations, like taxes.
VA
Valentine
2 years ago
I think it's original cost because it's part of the initial purchase price.
HA
Harrison
2 years ago
Taxes paid at the time of purchase are considered as operating cost.
LE
Lettie
2 years ago
D. Capital Expense, no doubt about it. I bet the tax man would love to see us all treat it as an operating cost!
BR
Broderick
2 years ago
D. Capital Expense, no doubt about it. I bet the tax man would love to see us all treat it as an operating cost!
AL
Alpha
2 years ago
D) Capital Expense
DI
Diane
2 years ago
C) Operating Cost
GR
Grover
2 years ago
B) Operating Expense
ED
Edelmira
2 years ago
A) Original Cost
ME
Melda
2 years ago
Operating expense? Nah, that's for the day-to-day stuff. Taxes are more like a one-time thing, so it's gotta be a capital expense.
VE
Veta
2 years ago
I see your point, but I still think it's a capital expense because it's a one-time cost for the asset.
EM
Emeline
2 years ago
Actually, I think it's an original cost because it's directly related to the purchase.
AN
Andra
2 years ago
No way, I'm pretty sure it's an operating cost. It's part of the cost of doing business.
JA
Jamika
2 years ago
I think taxes paid at the time of purchase are considered a capital expense.
VO
Von
2 years ago
Hmm, taxes at the time of purchase? That's gotta be a capital expense, right? I mean, who wants to pay for that out of their pocket money?
RA
Raymon
2 years ago
Yeah, I agree. It's not something you want to pay for out of your own pocket.
EL
Elza
2 years ago
I think you're right, it's definitely a capital expense.